3. UY VS.

PUZON
GR No. L-19819, October 26, 1977

Please see separate file for the digest. Syllabi below:

Syllabi:

a. Evidence; The appellate court accords respect to the trial court’s conclusions on credibility of witnesses.
-

The question of whom to believe being a matter largely dependent on the trier’s discretion, the
findings of the trial court, who had the better opportunity to examine and appraise the factual issue,
certainly deserve respect.

b. Partnerships; Damages; A partner in a construction venture who failed to stand by his commitment to the
partnership will be ordered to reimburse to his co-partner whatever the latter invested and spent for the
projects of the venture. -

Since the defendant-appellant was at fault, the trial court properly ordered him to reimburse the
plaintiff-appellee whatever amount the latter had invested in or spent for the partnership on account of the
construction projects.

c. Partnerships; Damages; Indemnification for damages includes losses suffered and profits obligee failed
to obtain. -

Regarding the award of P200,000.00 as his share in the unrealized profits of the partnership, the
appellant contends that the findings of the trial court that the amount of P400,000.00 as reasonable profits
of the partnership venture is without any basis and is not supported by the evidence. The appellant
maintains that the lower court, in making its determination, did not take into consideration the great risks
involved in business operations involving as it does the completion of the projects within a definite period
of time, in the face of adverse and often unpredictable circumstances, as well as the fact that the appellee,
who was in charge of the projects in the field, contributed in a large measure to the failure of the
partnership to realize such profits by his field management. This argument must be overruled in the light of
the law and evidence on the matter. Under Article 2200 of the Civil Code, indemnification for damages
shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed
to obtain. In other words, lucrum cessans is also a basis for indemnification.

d. Partnerships; Damages; Award of compensatory damages being reasonable and not speculative is
upheld. -

Had the appellant not been remiss in his obligations as partner and as prime contractor of the construction
projects in question as he was bound to perform pursuant to the partnership and sub-contract agreements,
and considering the fact that the total contract amount of these two projects is P2,327,335.76, it is
reasonable to expect that the partnership would have earned much more than the P334,225.61 We have
hereinabove indicated. The award, therefore, made by the trial court of the amount of P200,000.00, as
compensatory damages, is not speculative, but based on reasonable estimate